FOR IMMEDIATE RELEASE Tuesday, November 28, 2017
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SAN FRANCISCO HOUSING ACCELERATOR FUND CLOSES THIRD LOAN AND RAISES ADDITIONAL $6 MILLION IN INVESTMENT CAPITAL FROM LOCAL BANKS
San Francisco, CA — The San Francisco Housing Accelerator Fund (the Fund) announced today that it has closed its third loan to nonprofit developers, enabling the preservation and new production of hundreds of affordable rental households in the City’s Mission and Excelsior neighborhoods. The SFHAF also recently closed on $3 million in senior capital from First Republic Bank and another $3 million from Beneficial State Bank, bringing the total Fund size to over $40 million.
The Fund’s most recent loan went to the Mission Economic Development Agency (MEDA) to enable the acquisition of 305 San Carlos Street. The project will preserve 10 homes for longtime Mission residents, including several multi-generational Latino families. The Fund’s loan will also provide capital for the construction of an additional unit of housing in the building’s current garage space, providing a new permanently affordable home for a family in the Mission. The loan will allow MEDA to preserve two commercial spaces also on the site, which they anticipate renting to local businesses.
The Fund is a public-private partnership, launched in April 2017 with an initial investment from Citi Community Development, designed to provide mission-driven developers with nimble and flexible capital to acquire buildings and land for affordable housing in San Francisco. The SF Housing Accelerator Fund is a nonprofit entity which acts as a financial intermediary, offering flexibility and efficiency by combining capital from a variety of sources — public, private and philanthropic — into a single independent capital pool. The Fund closed its first round of capital in April, $37 million in total led by investments of $20 million from Citi Community Capital, $10 million from the city of San Francisco, and $6.5 million philanthropic capital from Dignity Health, the San Francisco Foundation, and the Hewlett Foundation.
The Fund’s goal is to accelerate the preservation and production of over 1,500 affordable housing units over its first five years — and with the closing of three loans totaling $18 million in its first few months of full operations, it is 152 homes closer to its goal.
The three loans have already delivered tangible impact in preserving the livelihoods of long-term, low-income residents. Rudy and Karen Sortos, two of the residents of 1411 Florida, were at risk of eviction and sought support from MEDA who partnered with the SFHAF to save their building.
“We have lived in our apartment for over 27 years, but know of many Mission residents like us who have had to move from San Francisco once their buildings were sold. That’s why we feared the same would happen to us,” said Sortos. “Although we have done everything to stay in this country, such as becoming citizens eight years ago, our only option would be to return to our home country, where things are very dangerous and unsafe right now.”
The couple initially came to MEDA requesting translation of a letter found posted on their front door at 1411 Florida in the Mission. MEDA immediately signed up the Sortoses for below market rate (“BMR”) rental opportunities while also reaching out to the seller’s agent and to the City and the Housing Accelerator Fund about purchasing the building as part of the City’s Small Sites Program. After a month of negotiations, MEDA was successfully able to get into contract. By borrowing from the Fund, MEDA can also complete an ADU (Additional Dwelling Unit) conversion and extensive capital improvements prior to conversion to the City’s Small Sites Program. Additionally, given Mrs. Sortos’s mobility issues and her problem with living on the third floor in a walk-up building, MEDA can move the Sortoses to the new ADU on the ground-floor once the unit is constructed.
“Throughout this process, MEDA helped us apply for BMR rentals as a back-up plan in the event the organization could not buy our building. We were not looking forward to moving to a new, unfamiliar neighborhood through the BMR program, but it was better than having to leave the city we love. We left fate in God’s hands and prayed for the best outcome. When we got the call that MEDA had become the new owner of 1411 Florida, we breathed a collective sigh of relief. Our family is very grateful to MEDA for their support throughout this entire stressful period in our lives. I also want to add that a week after hearing the good news, we received a letter stating that we were selected for a BMR. We were very happy to pass the opportunity on to another deserving applicant, as we now get to stay in our home!” said Sortos.
The Small Sites program has been stabilizing buildings over the last two years through the acquisition and rehabilitation of tenant occupied buildings that are susceptible to eviction and displacement. The Housing Accelerator Fund will allow the Small Sites Program to stabilize additional buildings faster and help developers to purchase land for new affordable housing production.
“The need for more affordable housing in San Francisco is critical, with a growing number of Bay Area households straining under burden of paying up to half of their income on rent,” said Bob Annibale, Global Director of Citi Community Development and Inclusive Finance. “By closing three loans in just over six months of operation, the San Francisco Housing Accelerator Fund was able to preserve and create more than 150 units of affordable housing that would not otherwise have been in the pipeline. It’s a testament to the effectiveness and agility made possible by the Fund’s innovative public-private funding model.”
“We’ll have saved 16 buildings – 95 households and 10 businesses – from eviction via the Small Sites Program,” said Karoleen Feng, Director of Community Real Estate at MEDA. “This year, we’ve gone even deeper in our work – saving buildings where our families going to Mission schools live, buildings along Mission Street – the lifeblood of the Mission District and buildings at risk because of new construction in the immediate area. We are competing with so many cash-rich buyers for sites like these that we rely on the Housing Accelerator Fund for the flexibility and speed to save more buildings, at more competitive prices.”
The Small Sites Program was launched in July 2014 with an initial $3 million as a pilot program after a six month stakeholder process. Since then, SSP has been allocated $84 million through the 2018 Fiscal Year. The program has stabilized 299 people to date, in 24 buildings with 150 residential units and 8 commercial spaces closed. Twelve additional buildings are pending, resulting in a total unit count of 269 units, 24 group housing units and 19 commercial spaces. Partner developers include Mission Economic Development Agency, Chinatown Community Development Center, SF Community Land Trust, San Francisco Housing Development Corporation, and Mission Housing Development Corporation.
“What we are most focused on is how we can give our incredible affordable housing developer partners more resources: more buying power in this competitive market, and a greater capacity to do more preservation and production of affordable housing, faster,” said Housing Accelerator Fund Executive Director Rebecca Foster. “Our affordable housing development community is the best in the country – and we’re providing them with more leverage.”
- Closing Date: June 7, 2017
- Sponsor: BRIDGE Housing Corporation
- Total Loan Amount: $9M
- Impact: 134 new units, ground floor community health clinic. Without the Fund, BRIDGE’s purchase agreement on this strategic site would have expired.
- Closing Date: May 24, 2017
- Sponsor: Mission Economic Development Agency (MEDA)
- Total Loan Amount: $3,510,000
- Impact: 6 households preserved, plus an additional dwelling unit (ADU). The ADU is a first for the City’s Small Sites program, allowing longtime elderly tenants to age in place in a new ground floor apartment.
305 San Carlos
- Closing Date: October 31, 2017
- Sponsor: Mission Economic Development Agency (MEDA)
- Total Loan Amount: $5,726,568
- Impact: 10 residential units and 2 commercial units preserved. Many of the units house multi-generational Latino families. An additional dwelling unit is planned for current garage space, creating a new unit of affordable housing in the Mission. MEDA anticipates renting the spaces to businesses participating in MEDA’s business development programs.
About the San Francisco Housing Accelerator Fund
The San Francisco Housing Accelerator Fund is committed to the preservation and expansion of quality affordable housing for economically disadvantaged individuals and households. Through an innovative public-private partnership with the city of San Francisco, local foundations, private lending institutions, and corporations, the SFHAF provides powerful new financing tools to ensure that San Francisco remains vibrant, equitable, and inclusive for all.
Additional information may be found at www.sfhaf.org | LinkedIn: www.linkedin.com/company/san-francisco-housing-accelerator-fund
About Citi Community Development
Citi Community Development leads Citi’s commitment to financial inclusion and economic empowerment for underserved individuals, families and communities across the U.S. Through innovative collaborations with municipalities, community groups and leading nonprofit organizations, we harness Citi’s expertise, products and services to help expand opportunity for all.
Additional information may be found at http://citicommunitydevelopment.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi